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Former Taos housing director, husband sentenced in theft of HUD funds

Carmella Martinez and husband convicted

For the Headlight

Posted:
01/16/2014 02:04:09 PM MST

ALBUQUERQUE, N.M. >> A federal judge sentenced the former executive director of the Taos County Housing Authority (TCHA) and her husband to prison terms for conspiring to steal federal funds. The couple also was ordered jointly to pay $786,014.04 in restitution. Carmella Martinez, 42, of Arroyo Seco, N.M., was sentenced to 30 months in federal prison and her husband Paul G. Martinez, 44, was sentenced to 24 months of imprisonment. Each will serve a two-year term of supervised release when released from custody.

The sentences were announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge Phyllis Grissom Robinson, Region 6, U.S. Department of Housing and Urban Development (HUD) Office of Inspector General, and Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI.

Carmella and Paul Martinez were charged in Dec. 2012 in a 49-count federal indictment with conspiracy, theft from programs receiving federal funds, and theft of government property. The indictment alleged that between Nov. 2003 and Dec. 2011, Carmella and Paul Martinez stole federal funds provided by HUD to the TCHA for a housing program that provides affordable housing for low-income Americans. During that time, Carmella Martinez was employed by the TCHA, initially as a Financial Specialist and later as its Executive Director.

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HUD is a federal agency with a core mission to make quality, affordable housing accessible to all Americans. It oversees and funds programs designed to provide affordable housing to low-income Americans, including the Housing Choice Voucher Program which is commonly referred to as "Section 8." Through the Section 8 Program, HUD pays rent subsidies known as "Housing Assistance Payments" (HAP) to approved property owners and landlords on behalf of eligible low-income beneficiaries. The TCHA administers the Section 8 Program on behalf of HUD in Taos County and receives approximately $2.8 million in funds annually from HUD.

According to the indictment, while employed by the TCHA, Carmella Martinez was responsible for processing HAP checks to approved Section 8 property owners and landlords and providing preliminary approval of requests for rent subsidies to property owners and landlords under the Section 8 Program. She abused her position with TCHA by conspiring with her husband to engage in the theft of Section 8 housing funds. Carmella Martinez stole the money by issuing fraudulent HAP checks for Section 8 housing assistance to payees, including to Paul Martinez and to bank accounts held by her and Paul Martinez. Carmella and Paul Martinez then presented the fraudulent checks for payment at various locations.

The couple pled guilty in Aug. 2013, to Count 1 of the indictment charging them with conspiracy to commit theft concerning programs receiving federal funds and to commit theft of government property. In her plea agreement, Carmella Martinez admitted that she began issuing fraudulent, duplicate Section 8 HAP checks for the benefit of herself and her husband in 2000, and that her husband began conspiring with her to steal federal funds from the TCHA in 2003. Carmella Martinez admitted that she and her husband engaged in their unlawful scheme until Dec. 2011, when they learned they were the subjects of a criminal investigation, and that she and her husband stole at least $786,014.04 in federal funds through their unlawful scheme.

In his plea agreement, Paul Martinez admitted that he began conspiring with his wife to steal funds from TCHA, a program that receives federal funds, in 2003, and that their scheme continued until Dec. 2011, when they learned about the criminal investigation that led to the indictment against them.

As required by the plea agreements, the United States moved to dismiss the remaining 48 counts of the indictment after Carmella and Paul Martinez have been sentenced.

Special Agent in Charge Phyllis Grissom Robinson of Region 6 of HUD's Office of Inspector General said "The sentence imposed against Ms. Martinez and her husband should send a strong message that the United States Department of Housing and Urban Development, Office of Inspector General will aggressively investigate those who fail to exercise integrity in connection with HUD programs, the end result will be both unpleasant and costly to the offending party."

"For many low-income people in New Mexico, government rent assistance can mean the difference between having a roof over their heads or being homeless. Stealing from these programs is like taking money out of the pockets of those who need it the most," said Special Agent in Charge Carol K.O. Lee of the FBI's Albuquerque Division. "The FBI will continue to work with our partners to make sure this kind of crime is aggressively investigated and the guilty parties brought to justice. I thank the FBI Special Agents who worked on this case, along with the U.S. Department of Housing and Urban Development Office of Inspector General and the U.S. Attorney's Office."

Acting U.S. Attorney Steven C. Yarbrough commended the HUD Office of Inspector General, the Albuquerque Division of the FBI and Assistant U.S. Attorney Shana B. Long for their work on the case.

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